SWITZERLAND
ZURICH AND THE LIMMAT RIVER
SPECIAL ADVERTISING SECTION
International criticism that banking secrecy in Switzerland is being used as a means of
facilitating tax evasion is disheartening to many within the legal communities of Zurich and
Geneva. After the attention UBS received in 2008, Credit Suisse bankers were indicted in
the US earlier this year and more litigation looks set to follow. Leading Swiss lawyers
consider these developments and comment on their impact.
Camilla Sutton reports
UBS
THE end results of the UBS tax evasion/avoidance debacle – that the bank was fined $780m and that in 2010 the Swiss parliament ratified a 2009 agreement to transfer over 4000 UBS client files to the US – are
well documented. ‘The evidence gathered in connection
with the prosecution of the Californian tycoon Oleg
Olenicoff for tax fraud and the former UBS manager
Bradley Birkenfeld – who pleaded guilty to conspiracy to
defraud the IRS and cooperated with the prosecuting
authorities – permitted the US on the one hand to initiate a criminal investigation against UBS and to eventually threaten the bank with filing an indictment,’ explains
Bernhard Lötscher, a partner who specialises in mutual-administrative assistance matters, including tax information exchange proceedings from Swiss law firm CMS von
Erlach Henrici Ltd. ‘UBS was forced to enter into a
deferred prosecution agreement with the Tax Division of
the US Department of Justice and the US Attorney’s
Office for the Southern District of Florida in order to avoid
a further escalation of the criminal case. In such context
UBS had to admit to certain wrongdoings and, more
importantly, agree to exit the so-called United States
cross-border business. Henceforth, banking or securities
services could only be provided to US persons through
SEC registered entities, and any US persons wishing to
continue their relationship with UBS had to supply a fully
executed IRS Form W- 9. UBS, being the biggest player in
the private banking sector, was thus forced to desist from
providing offshore services to US persons.’
‘On the other hand,’ continues Bernhard Lötscher,
‘the information obtained in the course of the prosecu-
